81(R) HB 3031 - Enrolled version

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	H.B. No. 3031




	AN ACT
	relating to the sale by the Brazos River Authority of certain
	residential and commercial leased lots and other real property in
	the immediate vicinity of Possum Kingdom Lake.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Chapter 8502, Special District Local Laws Code,
	is amended by adding Section 8502.020 to read as follows:
	Sec. 8502.020. SALE OF AUTHORITY PROPERTY. (a)
	Definitions. In this section:
	(1) "Authority Land" means the FERC Project Area and
	all other real property owned by the Authority at the Lake as of the
	date before Closing, save and except for the Leased Tract.
	(2) "Buffer Zone" means that twenty-five or fifty foot
	strip of land measured landward horizontally from the 1000' contour
	line that is included in the FERC Project Area as defined in the
	FERC License.
	(3) "Close" or "Closing" means the date on which the
	Authority transfers its interest in the Leased Tract, in whole or in
	part, to a Purchaser. There may be multiple closing dates if the
	Leased Tract is sold in portions.
	(4) "Commercial Leased Land" means that portion of the
	Leased Tract that is located wholly outside the FERC Project Area
	and that is leased for commercial purposes as of the date the
	Restrictions are placed of record.
	(5) "Consumer Price Index" means the consumer price
	index for Housing, Dallas-Fort Worth, TX area, Series Id:
	CUURA316SAH, CUUSA316SAH, Base Period: 1982-84 = 100, as published
	by the Bureau of Labor Statistics of the United States Department of
	Labor, or its equivalent substitute should this series be
	discontinued.
	(6) "Contract" means the Authority entering into a
	purchase and sale agreement with a Purchaser for the transfer of the
	Authority's interest in the Leased Tract, in whole or in part.
	(7) "Driveways" means those certain private gravel
	and/or paved driveways that connect a Road or other street or
	thoroughfare to an individual Leased Tract or any improvements
	thereon; Driveways also includes those shared or common Driveways
	that serve more than one Leaseholder or individual Leased Tract.
	(8) "Environmental Laws" means the Comprehensive
	Environmental Response, Compensation and Liability Act of 1980, the
	Toxic Substances Control Act, the Clean Water Act, the Resource
	Conservation and Recovery Act and any other similar federal, state
	or local law, rule or regulation respecting the environment or
	Hazardous Materials, together with all rules and regulations
	promulgated thereunder and all present or future amendments
	thereto.
	(9) "FERC License" means the order of the Federal
	Energy Regulatory Commission issuing a license to the Authority for
	project number 1490-003-Texas on September 8, 1989, as such license
	has been renewed, extended, or amended and may be further renewed,
	extended, or amended at any time and from time to time, and also
	including the Amendment to the original FERC License, which
	amendment was issued on May 15, 1980, to the extent incorporated or
	referenced in the FERC License.
	(10) "FERC Project Area" means that portion of
	Authority property that is subject to the FERC License, as
	identified and defined in the FERC License, as may be amended at any
	time and from time to time, and which FERC Project Area may move or
	change over time due to natural forces.
	(11) "Ground Lease" means each of those certain
	residential and/or commercial ground leases between the Authority
	and a Leaseholder, and the respective heirs, successors, and
	assigns.
	(12) "Hazardous Materials" means underground storage
	tanks, petroleum and petroleum products, asbestos, PCB's,
	urea-formaldehyde and any hazardous or toxic substances,
	pollutants, contaminants, wastes, or materials as defined under any
	Environmental Laws.
	(13) "Lake" means Possum Kingdom Lake located in
	Young, Palo Pinto, Stephens, and Jack Counties. The boundary of the
	Lake is defined by the 1000' contour line, as that contour may
	meander and change over time with natural forces, including erosion
	and accretion. The "1000' contour line" means the line running
	along the periphery of the Lake if the surface of the Lake is at an
	elevation of 1000 feet above mean sea level, as measured from the
	top of the spillway crest gates of the Morris Sheppard Dam, as such
	line may move and shift from time to time due to natural forces.
	(14) "Leased Tract" or "Tract" means all or any
	portion of the Commercial Leased Land, the Residential Leased Land,
	and Undeveloped Strips, whether owned by the Authority, Purchaser,
	or Owner and whether or not subject to a lease or Ground Lease or
	owned in fee simple.
	(15) "Leaseholder" means a person or entity that has a
	residential lease or a commercial lease with the Authority,
	including the Leaseholder's heirs, successors, and assigns.
	(16) "Lienholder" means any mortgagee under a
	mortgage, or a trustee or beneficiary under a deed of trust,
	constituting a lien on any portion of the Leased Tract.
	(17) "Owner" means the record holder of fee simple
	title to any portion of the Leased Tract sold pursuant to this
	section, including its heirs, personal representatives,
	successors, and assigns. This term does not include a Purchaser who
	acquires the Leased Tract from the Authority in accordance with
	Subsection (b).
	(18) "Property" means the Leased Tract and the
	Authority Land.
	(19) "Purchaser" means any person or entity, including
	its successors in interest, heirs, or assigns, that acquires the
	Leased Tract (or any portion thereof) from the Authority in
	accordance with Subsection (b). This term does not include those
	Leaseholders that acquire individual Leased Tracts from the
	Purchaser in accordance with Subsection (b).
	(20) "Ranch" means that certain subdivision of record
	in Palo Pinto County, Texas, according to the map or plat of record
	in Volume 7, Page 71, Plat Records of Palo Pinto County, Texas, as
	it may be amended or modified from time to time, which subdivision
	includes a portion of the Leased Tract and a portion of the
	Authority Land.
	(21) "Ranch Agreement" means that certain agreement by
	and among the Authority, The Ranch on Possum Kingdom, L.P., and Hill
	Country Harbor Village, L.P., effective as of August 1, 1997, and
	dated December 12, 1997.
	(22) "Ranch Declarations" means that certain
	Declaration of Covenants, Conditions and Restrictions for The Ranch
	on Possum Kingdom Palo Pinto County, Texas, dated December 8, 1997,
	as recorded in Volume 944, Page 403, Official Public Records of Palo
	Pinto County, Texas.
	(23) "Residential Leased Land" means that portion of
	the Leased Tract located outside the FERC Project Area that is
	leased for single-family residential purposes only as of the date
	the Restrictions are placed of record. This term does not include
	land that is subject to a commercial lease, where such lessee is
	authorized to sublease for residential purposes.
	(24) "Restrictions" means the easements, covenants,
	restrictions, liens, encumbrances, and requirements contained in
	the Declaration of Restrictive Covenants, Easements, and
	Conditions to be recorded by the Authority as set forth in
	Subsection (d).
	(25) "Roads" means those paved or gravel streets,
	roads, and thoroughfares owned and maintained by the Authority that
	are located in Stephens, Jack, Young, or Palo Pinto County and that
	provide access, ingress, and egress to and from the Leased Tract,
	the Lake, and/or Authority Land; provided, however, that the
	definition of Roads, as used herein, does not include:
	(A) Driveways;
	(B) paved or gravel roads located wholly within
	Authority public use areas;
	(C) paved or gravel roads located within gated
	Authority operations areas; and
	(D) paved or gravel roads located wholly within
	an individual tract that is part of the Commercial Leased Land,
	which roads only serve that individual commercial Tract.
	(26) "Shoreline Management Plan" means that certain
	Possum Kingdom Shoreline Management Plan and Customer Guide,
	adopted May 22, 2006, and amended July 31, 2006, and as may be
	revised and/or further amended by the Authority at any time and from
	time to time.
	(27) "Undeveloped Strips" means small strips of
	unleased land located between individual lots within the Leased
	Tract and small parcels of land between the Leased Tract and Roads
	that the Authority determines in its sole discretion to include in
	any sale of all or any portion of the Leased Tract.
	(b) Sale to Purchaser. Prior to January 1, 2011, the
	Authority may sell the Leased Tract in whole or in part, to a
	Purchaser in accordance with applicable law, this subsection, and
	Subsections (d), (e), (f), (g), (h), and (i). Any sale of the
	Leased Tract to a Purchaser under this subsection shall be subject
	to the following:
	(1) Each Leaseholder shall have the opportunity to buy
	such Leaseholder's individual Leased Tract from the Purchaser or to
	continue leasing the applicable Leased Tract from the Purchaser in
	accordance with the following purchase or lease options. The
	Purchaser shall:
	(A) Permit the Leaseholder to purchase such
	Leaseholder's individual Leased Tract in cash or through lender
	financing for 90% of land only assessed value without any
	exemptions (as determined by the appraisal district) for the year
	2008, such option to be available at Closing as set forth in
	Subdivision (2) and for a period of at least one year from Closing.
	(B) Permit the Leaseholder to purchase for the
	percent of assessed value only as set forth in Paragraph (A) such
	Leaseholder's individual Leased Tract via seller financing, with a
	down payment of ten percent (10%) and an interest rate of six
	percent (6%), with a 30-year amortization, such option to be
	available at Closing as set forth in Subdivision (2) and for a
	period of at least one year from Closing. The leaseholder shall not
	be charged any origination fees or points by purchaser as a part of
	the closing costs involved in the seller financing option.
	(C) Offer a new 99-year lease at a rental rate of
	6% of the land only assessed value without any exemptions (as
	determined by the appraisal district) for the year 2008, with
	annual Consumer Price Index increases or decreases, such option to
	be available for a period of at least one year from Closing. The
	99-year lease will include an option to purchase the applicable
	Leased Tract at the land only assessed value without any exemptions
	(as determined by the appraisal district) at the time of purchase
	(but not less than the 2008 land only assessed value without any
	exemptions).
	(D) Offer a new 20-year lease with a rental rate
	as determined by the current Authority lease rate methodology or
	other lease rate structure as set forth in the Ground Lease as
	applicable (and including increases and adjustments to such rates)
	with annual Consumer Price Index increases or decreases, to
	Leaseholders who are over the age of 65 and who receive an ad
	valorem tax exemption under Section 11.13, Tax Code, for a
	structure on the Leaseholder's individual Leased Tract, such option
	to be available for a period of at least one year from the date of
	Closing. The Leaseholder must have received the ad valorem tax
	exemption for a structure on the Leaseholder's individual Leased
	Tract by January 1, 2009. The 20-year lease will include an option
	to purchase the applicable Leased Tract at the land only assessed
	value without any exemptions (as determined by the appraisal
	district) at the time of purchase (but not less than the 2008 land
	only assessed value without any exemptions).
	(E) Ratify the existing Ground Lease of any
	Leaseholder who does not timely exercise one of the foregoing
	options, such ratification to include:
	(i) adoption of the current Authority lease
	rate methodology or other lease rate structure as set forth in the
	Ground Lease, as applicable (and including increases and
	adjustments to such rates) for a period of 8 years from Closing;
	(ii) an option permitting the Leaseholder
	to purchase such Leaseholder's individual Leased Tract for the land
	only assessed value without any exemptions (as determined by the
	appraisal district) at the time of purchase, or for the year 2008,
	whichever is greater, for a period of 8 years from Closing; and
	(iii) an agreement to extend Ground Leases
	as necessary to allow for this full 8-year purchase option period.
	Nothing in this subsection shall preclude the Purchaser from
	offering additional purchase or lease options to the Leaseholders,
	provided any additional options are made available to all
	Leaseholders on an equal basis.
	(2) A Leaseholder who desires to buy such
	Leaseholder's individual Leased Tract from the Purchaser pursuant
	to the option set forth in either Subdivision (1)(A) or (B)
	concurrently with the Purchaser's Closing must exercise the desired
	option as follows:
	(A) notify the Authority and Purchaser in writing
	within 90 days after the effective date of the Contract between the
	Authority and Purchaser of Leaseholder's intent to purchase the
	applicable Leased Tract;
	(B) Leaseholder and Purchaser will enter into a
	purchase and sale agreement in substantially the form as agreed to
	between the Authority and Purchaser, which form will be attached to
	the Contract, and which individual purchase and sale agreements
	will be ratified by Purchaser at the Closing; the purchase and sale
	agreement shall contain, at a minimum, the following terms and
	conditions:
	(i) the purchase price for the individual
	Leased Tract in accordance with the applicable purchase option;
	(ii) earnest money in the amount of $1,000
	to be delivered to the title company agreed to by Leaseholder and
	Purchaser and approved by the Authority along with the executed
	purchase and sale agreement;
	(iii) the Leaseholder's obligation to
	provide a survey as set forth in this subsection and a title
	commitment from the agreed upon title company;
	(iv) a 60-day period commencing on the date
	of the purchase and sale agreement for the Leaseholder to obtain
	financing (if exercising its option pursuant to Subdivision (1)(A)
	above);
	(v) the Leaseholder must notify Purchaser
	of any objections to any items on the title commitment and/or survey
	within fifteen (15) days after receipt of same, but in no event less
	than 45 days prior to the anticipated date of Closing, provided
	however that neither the Purchaser nor the Authority shall have any
	obligation to cure any such items or to incur any expenses in curing
	any items, except that Purchaser and/or the Authority, as
	applicable, shall use good faith efforts to address and/or remove
	those requirements or exceptions shown on Schedule C of the title
	commitment that are applicable to or created by the Purchaser
	and/or Authority, as applicable, and, notwithstanding the
	foregoing, neither the Purchaser nor the Authority shall have any
	obligation to cure any exceptions on the attached Schedule C
	regarding legal right of access to or from the applicable Leased
	Tract;
	(vi) Leaseholder is purchasing the
	applicable individual Leased Tract in its "as-is" condition and
	Purchaser shall have no obligation to make any improvements or
	modifications thereto, nor will Purchaser make any representations
	or warranties as to the condition or use of the applicable Leased
	Tract;
	(vii) Purchaser shall not be responsible
	for any broker fees or commissions due to any broker or agent
	engaged or claiming to have been engaged by Leaseholder for the
	purchase and sale of the applicable Leased Tract;
	(viii) Purchaser shall be responsible for
	costs related to the release of any existing liens placed on the
	applicable portion of the Leased Tract by Purchaser, including
	prepayment penalties and recording fees, release of Purchaser's
	loan liability to the extent applicable to the individual Leased
	Tract, tax statements or certificates, preparation of the deed, and
	one-half of any escrow fee;
	(ix) Leaseholder shall be responsible for
	any costs associated with a loan or financing for the applicable
	portion of the Leased Tract, including, without limitation, loan
	origination, discount, buy-down, and commitment fees, appraisal
	fees, loan application fees, credit reports, preparation of loan
	documents, loan-related inspection fees, and interest on the notes
	from the date of disbursement to date of first monthly payment; the
	cost of the survey; recording fees; copies of easements and
	restrictions; mortgagee title policy with endorsements required by
	lender, if any; one-half of any escrow fee; any prepaid items,
	including without limitation, insurance premiums and reserves and
	taxes; underwriting fee; and any title policy (including
	endorsements) obtained by Leaseholder;
	(x) Taxes will be prorated as of the date of
	Closing; if taxes are not paid as of the date of Closing, then
	Leaseholder shall be responsible for the payment of taxes; and
	(xi) the agreement between Leaseholder and
	Purchaser shall be contingent on Closing occurring within the
	timeframes set forth in this subsection.
	(C) Leaseholder shall deliver to Authority and
	Purchaser no less than forty-five days prior to Closing, at the
	Leaseholder's expense, an accurate survey of the individual Leased
	Tract (including any Undeveloped Strips being included in such
	Leased Tract), which survey is acceptable to the Authority and
	Purchaser. To be acceptable to the Authority and Purchaser, the
	survey must:
	(i) be acceptable to the title company
	selected by the Purchaser and Leaseholder and approved by the
	Authority for purposes of issuing any policy of title insurance on
	the applicable portion of the Leased Tract;
	(ii) be prepared by a licensed state land
	surveyor or a registered professional land surveyor acceptable to
	the Authority;
	(iii) include the boundary of the
	Leaseholder's Leased Tract and any Undeveloped Strips being
	conveyed, which boundaries must be consistent with the master
	survey prepared on behalf of the Authority in conjunction with the
	sale of the Leased Tract to the Purchaser;
	(iv) include all improvements on the Leased
	Tract and indicate any encroachments across the applicable boundary
	lines or into the FERC Project Area or Buffer Zone; Leaseholder must
	provide evidence that any such encroachments across boundary lines
	or into the FERC Project Area or Buffer Zone have been cured by the
	Leaseholder (either by removal of such encroachment or by written
	agreement between the affected parties permitting such
	encroachment to continue) prior to the survey being deemed
	acceptable; and
	(v) be reviewed and approved by the
	Authority and Purchaser; the Authority, Purchaser, and their
	representatives or agents may perform an inspection of the
	applicable Leased Tract to verify the accuracy of the Survey and any
	encroachments thereon;
	(D) On or before Closing, the purchase and sale
	agreement between the Leaseholder and Purchaser and any earnest
	money that may be required pursuant to such agreement shall be
	timely delivered to a title company or escrow agent acceptable to
	the Authority and agreed to by Leaseholder and Purchaser in such
	agreement;
	(E) On or before Closing, Purchaser and
	Leaseholder shall complete all documentation necessary to
	effectuate transfer of the applicable Leased Tract from the
	Purchaser to the Leaseholder and deliver such completed and
	executed documents to the applicable escrow agent; and
	(F) Promptly after Closing, the deed and any
	other applicable documents effectuating transfer of such Leased
	Tract to the Leaseholder shall be recorded in the county records
	where the Leased Tract is located promptly after such escrow agent
	receives written notice from the Authority or title company or
	escrow agent facilitating the Closing of the Leased Tract from the
	Authority to Purchaser that such Closing has been completed and the
	necessary documents have been recorded pursuant to such Closing. In
	no event shall the deed or any other documents transferring the
	applicable portion of the Leased Tract to the Leaseholder be
	recorded prior to Closing.
	(3) Closing shall occur no later than December 31,
	2010. The Authority shall post on its website no later than thirty
	days after entering into a Contract for sale with Purchaser the
	effective date of such Contract and the anticipated date of
	Closing, which date shall be at least six (6) months from the
	effective date of the Contract. Any changes to the anticipated date
	of Closing shall also be posted on the Authority's website. These
	dates shall be used to establish the time periods provided in
	Subdivision (2).
	(c) Sale to Leaseholders. This subsection shall only apply
	to, and be effective for, those portions of the Leased Tract (if
	any) for which Closing has not occurred on or before December 31,
	2010, pursuant to Subsection (b), in which case the effective date
	of this subsection shall be January 1, 2011. Upon the effective
	date of this subsection, the Authority shall suspend any applicable
	sale efforts under Subsection (b) for a period of two years
	beginning on the effective date of this subsection and initiate a
	tract by tract sale of the Leased Tract to the then-current
	Leaseholders as follows:
	(1) For a period of two years beginning on the
	effective date of this subsection and in accordance with the
	procedures set forth in this subsection, and subject to Subsections
	(d), (e), (f), (g), (h), and (i), the Authority shall provide
	Leaseholders the opportunity to purchase their individual Leased
	Tracts directly from the Authority. Leaseholders shall have until
	the expiration of such two-year period to submit a completed
	application of intent to purchase their individual Leased Tracts as
	provided by Subdivision (4).
	(2) The Authority shall determine if, and how, any
	Undeveloped Strips will be divided between adjacent Leaseholders
	and incorporated into any individual Leased Tract; provided,
	however, Leaseholders shall not be required to accept any such
	Undeveloped Strips.
	(3) On or before the effective date of this
	subsection, the Authority shall make available to the Leaseholders
	a form for an application of intent to purchase the Leaseholder's
	individual Leased Tract. Such application shall be deemed a
	contract subject to the provisions set out herein. The application
	of intent shall provide the Leaseholder a 30-day feasibility period
	beginning on the date such application is submitted in which the
	Leaseholder can determine the feasibility of purchasing the
	applicable individual Leased Tract, including the ability of such
	Leaseholder to obtain financing for such purchase.
	(4) A Leaseholder who desires to purchase such
	Leaseholder's individual Leased Tract must submit a completed
	application to the Authority on or before December 31, 2012. An
	application will be deemed "complete" upon the following:
	(A) Leaseholder delivers to the Authority an
	executed application of intent to purchase with all required
	information included in the application;
	(B) Leaseholder delivers an earnest money
	deposit, in good funds acceptable to the title company or escrow
	agent selected by the Authority, in the amount of $1,000 to such
	title company or escrow agent, which earnest money shall be
	nonrefundable after the expiration of the feasibility period except
	in the event closing does not occur due to the fault of the
	Authority;
	(C) any and all rent and other fees or amounts due
	to the Authority pursuant to such Leaseholder's Ground Lease have
	been paid and there are no amounts then outstanding which are past
	due;
	(D) Leaseholder has delivered to the Authority a
	survey that is acceptable to the Authority of the applicable Leased
	Tract (and any Undeveloped Strips being included in such Leased
	Tract). To be acceptable to the Authority, the survey must:
	(i) be acceptable to the title company
	selected by the Authority for purposes of issuing any policy of
	title insurance on the applicable portion of the Leased Tract;
	(ii) be prepared by a licensed state land
	surveyor or a registered professional land surveyor acceptable to
	the Authority;
	(iii) include the boundary of the
	Leaseholder's Leased Tract and any Undeveloped Strips being
	conveyed, which boundaries must be consistent with the master
	survey of the Leased Tract prepared on behalf of the Authority;
	(iv) include all improvements on the Leased
	Tract and indicate any encroachments across the applicable boundary
	lines or into the FERC Project Area or Buffer Zone; Leaseholder must
	provide evidence that any such encroachments across boundary lines
	or into the FERC Project Area or Buffer Zone have been cured by the
	Leaseholder (either by removal of such encroachment or by written
	agreement between the affected parties permitting such
	encroachment to continue) prior to the survey being deemed
	acceptable; and
	(v) be reviewed and approved by the
	Authority; the Authority or its representatives or agents may
	perform an inspection of the Leased Tract to verify the accuracy of
	the Survey and any encroachments thereon.
	(E) Leaseholder has delivered to the Authority a
	title commitment and, if requested by the Authority, any exception
	documents referenced therein, prepared by the applicable title
	company or escrow agent selected by the Authority; and
	(F) Leaseholder has delivered to the Authority
	written evidence from Leaseholder's lender or financial
	institution that Leaseholder has the financing or funds available,
	as applicable, to complete the purchase of Leaseholder's Leased
	Tract.
	(5) Completed applications that are timely delivered
	will be accepted and processed by the Authority in the order in
	which they are received; except that the Authority shall give
	preference in processing applications to Leaseholders who receive
	an ad valorem tax exemption under Section 11.13, Tax Code, for a
	structure on the Leaseholder's Leased Tract.
	(6) A Leased Tract sold under this subsection shall be
	sold for 90% of the land only assessed value without any exemptions,
	as determined by the appraisal district, for the year in which the
	Leaseholder's application of intent to purchase is submitted to the
	Authority, or for the year 2008, whichever is greater.
	(7) The Leaseholder purchasing such Leaseholder's
	Leased Tract is responsible for:
	(A) timely paying all rent and other fees or
	amounts due to the Authority pursuant to such Leaseholder's Ground
	Lease through the date of closing on the Leaseholder's portion of
	the Leased Tract;
	(B) obtaining and delivering to the Authority a
	survey of the applicable Leased Tract in accordance with
	Subdivision (4)(D) and curing any encroachments shown thereon, all
	at Leaseholder's expense;
	(C) obtaining and delivering to the Authority, at
	such Leaseholder's expense, a title commitment in accordance with
	Subdivision (4)(E); the Authority may, but shall have no obligation
	to, cure any objections that Leaseholder may have to the
	exceptions, covenants, easements, reservations or any other items
	reflected on the title commitment; provided, however, that the
	Authority shall use good faith efforts to address and/or remove
	those requirements or exceptions shown on Schedule C of the title
	commitment that are applicable to or created by the Authority, and,
	notwithstanding the foregoing, the Authority shall have no
	obligation to cure any exceptions on the attached Schedule C
	regarding legal right of access to or from the applicable Leased
	Tract;
	(D) delivering to the applicable title company or
	escrow agent on or before closing on the Leaseholder's Leased
	Tract, in good funds, the purchase price and all reasonable,
	normal, customary, and documented costs associated with the
	transfer of the individual Leased Tract to the Leaseholder
	including, without limitation, all escrow fees, recording fees,
	taxes on the land after the date of such closing, document
	preparation fees, the cost of any Title Policy (including any
	endorsements thereon) obtained by Leaseholder, and any costs
	associated with removing any liens on the applicable Leased Tract;
	and
	(E) timely delivering to the escrow agent any
	notices, statements, affidavits, or other documents required by the
	application, escrow agent, or at law to effectuate the transfer of
	the applicable Leased Tract to the Leaseholder.
	(8) For those completed applications of intent to
	purchase timely delivered to the Authority under this subsection,
	the purchase must be completed no later than June 30, 2013. For any
	individual Leased Tracts for which closing has not occurred by such
	date, the application shall be deemed terminated. The Authority
	shall not accept any applications of intent to purchase after
	December 31, 2012; and any applications of intent to purchase that
	are delivered to the Authority prior to such date but that are not
	"complete" as of such date in accordance with Subdivision (4) shall
	be rejected by the Authority. Leaseholders submitting an
	application of intent to purchase their individual Leased Tracts
	are responsible for ensuring that such application is deemed
	"complete" on or before December 31, 2012.
	(9) Any Ground Lease that would otherwise expire shall
	be automatically extended as necessary for one year terms to permit
	such Leaseholder the full two-year period to deliver such
	application of intent to purchase such Leaseholder's individual
	Leased Tract and to complete such transaction no later than June 30,
	2013.
	(10) The Owner of a Tract sold under this subsection
	shall pay the Authority any reasonable fees set by the Authority for
	any services the Owner accepts from the Authority. However, the
	Owner of a Tract is under no obligation to accept services from the
	Authority.
	(11) Any Tract subject to the Ranch Agreement shall
	only be subject to sale under this subsection if the Authority is
	released from its obligations under the Ranch Agreement relating to
	such Tract.
	(12) The following laws do not apply to sale of an
	individual Leased Tract under this subsection:
	(A) Chapter 272, Local Government Code;
	(B) Section 49.226, Water Code; and
	(C) Section 8502.013 of this code.
	(13) A provision that applies to the Leaseholder of a
	Leased Tract under this section applies to any subsequent Owner of
	the Leased Tract.
	(14) At closing on the individual Leased Tract, the
	Leaseholder shall pay any indebtedness secured by a lien on the
	Leaseholder's leasehold estate (including the Buffer Zone, whether
	or not included as part of the Leased Tract pursuant to Subsection
	(e)) or deliver the express written consent of the Lienholder on the
	leasehold estate in the Leased Tract permitting the Leaseholder to
	grant a purchase money lien on the fee simple estate in the Leased
	Tract.
	(15) At the closing of the applicable Leased Tract,
	the Authority will deliver a special warranty deed.
	(16) For any portion of the Leased Tract that has not
	been sold pursuant to this subsection on or before June 30, 2013,
	the Board shall sell any such remaining portion of the Leased Tract
	pursuant to terms and conditions determined by such Board.
	(d) Restrictions on Leased Tract. The Leased Tract (or any
	portion thereof) sold in accordance with Subsection (b) or (c)
	shall be subject to the following Restrictions, which shall be
	included, in substance, in a Declaration of Restrictive Covenants,
	Easements, and Conditions to be prepared by the Authority
	substantively in accordance with the following and recorded by the
	Authority, as declarant, in the applicable county records prior to
	any sale pursuant to Subsection (b) or (c):
	(1) Subject to Subdivision (10), no Owner, Purchaser,
	or Leaseholder may forbid, restrict, or take any action which
	effectively forbids or restricts the public from using the FERC
	Project Area and the adjacent areas of the Lake in accordance with
	the terms of the FERC License.
	(2) Each Owner, Purchaser, and Leaseholder shall agree
	to not block, restrict, or otherwise prohibit access over, through,
	or across any Road and further agrees that such Roads or portion
	thereof shall remain open for use by the Authority, other Owners or
	Purchasers, lessees of any portion of the Property (including
	Leaseholders) and the general public. Except for (i) those portions
	of the Property that are accessible by water only as of the
	effective date of the Restrictions, and/or (ii) restrictions of
	access existing as of the effective date of the Restrictions (e.g.,
	access to and from public roads that requires traversing real
	property not owned by the Authority, Owners, or Purchasers
	hereunder), and/or (iii) the covenants and restrictions of the
	Ranch Declarations (to the extent applicable to the Roads) or other
	restrictive covenants existing prior to the date the Restrictions
	are recorded of record, no Owner, Purchaser, or Leaseholder shall
	be permitted to block, restrict, or otherwise prohibit access on,
	over, or across the Roads.
	(3) The Driveways are not part of the Roads and shall
	be maintained by the Owner, Purchaser, or Leaseholder of the
	applicable Driveways. No Owner, Purchaser, or Leaseholder shall
	obstruct, prevent, or otherwise restrict access on, over or across
	any portion of a common Driveway by any such other Owner, Purchaser,
	or Leaseholder, or their guests or invitees, whose portion of the
	Property is served by such common Driveway. Owners, Purchasers,
	and/or Leaseholders whose portion of the Property is served by a
	common Driveway shall at all times have a nonexclusive right of
	ingress and egress over and across such common Driveway to access
	their portion of the Property.
	(4) All grants and dedications of easements,
	rights-of-way, restrictions, and related rights affecting the
	Leased Tract, made prior to the Leased Tract becoming subject to the
	Restrictions that are of record, or visible or apparent, shall be
	incorporated into such Restrictions by reference and made a part of
	the Restrictions for all purposes as if fully set forth therein and
	shall be construed as being adopted in each and every contract,
	deed, or conveyance executed or to be executed by or on behalf of
	the Authority conveying any part of the Leased Tract. The foregoing
	adoption of such easements includes, without limitation, any and
	all written easements or agreements, whether or not recorded,
	between the Authority and any other party for the installation,
	maintenance, repair, or replacement of utility lines located on,
	above, over, under, or beneath the Property.
	(5) The Authority shall reserve for itself and its
	successors, assigns, and designees the nonexclusive right and
	easement, but not the obligation, to enter upon the Property, the
	Lake and other bodies of water, if any, located within the Property
	(a) to install, keep, maintain, and replace pumps in order to obtain
	water for the irrigation of any portion of the Authority Land, (b)
	to construct, maintain, replace, and repair any wall, dam, or other
	structure retaining water therein, (c) to access, construct,
	maintain, replace, and repair any measurement stations, monuments,
	or other similar improvements, (d) to remove trash and other
	debris, and (e) to fulfill the Authority's obligations as a river
	authority and any obligations set forth in the FERC License, state
	water rights, or other governmental regulations. The Authority and
	its designees shall have an access easement through, over, and
	across any portion of the Leased Tract to the extent reasonably
	necessary to exercise the rights and responsibilities under this
	subdivision; provided, however, that (i) the Authority shall
	provide written notice at least 48 hours in advance of such entry to
	the Purchaser or Owner of such portion of the Leased Tract (except
	in the event of an emergency, in which case advance notice shall not
	be required, but the Authority shall provide such written notice as
	soon as practicable thereafter); (ii) the Authority shall promptly
	repair any damage to the portion of the Leased Tract caused by the
	Authority's entrance onto such Owner's or Purchaser's portion of the
	Leased Tract; and (iii) the Authority shall use reasonable efforts
	to avoid interfering with the Owner's or Purchaser's use of the
	portion of the Leased Tract.
	(6) The Authority shall reserve for itself and its
	successors, assigns, and designees a perpetual right, power,
	privilege, and easement to occasionally overflow, flood, and
	submerge that portion of the Property located at or below the
	elevation contour of 1015' above mean sea level in connection with
	the Authority's operation and maintenance of the Lake. The
	Authority shall have no liability to any Owner, Purchaser,
	Leaseholder, or any other person for any damages, claims, costs,
	injuries, or liabilities to any person or the Property or any
	improvements thereon that are caused by or arise from any act or
	omission by the Authority in connection with the foregoing right
	and easement.
	(7) Additional land may be included in the Property or
	Leased Tract at any time by the Authority, as long as the Authority
	owns any portion of the Property, by recording an amendment to these
	Restrictions in each of the counties in which the Property is
	located. Upon such additions, the Restrictions shall apply to the
	added land and the rights, privileges, duties, and liabilities of
	the Owners or Purchasers subject to the Restrictions shall be the
	same with respect to the added land as with respect to the Property
	originally covered by the Restrictions. As additional lands are
	added hereto, the Authority shall, with respect to said land,
	record amendments that may incorporate the Restrictions therein by
	reference and that may supplement or modify the Restrictions with
	such additional covenants, restrictions, and conditions that may be
	appropriate for those added lands.
	(8) The Restrictions may not be modified in any
	respect whatsoever or terminated, in whole or in part, except with
	the consent of (i) the Owners or Purchasers of at least sixty
	percent (60%) of the individual lots that comprise the Residential
	Leased Land and Commercial Leased Land, and (ii) the Owners or
	Purchasers of at least sixty percent (60%) of the land area of the
	Authority Land, and (iii) the Authority, for so long as the
	Authority has any interest in the Property, whether as an Owner or
	holder of the FERC License or otherwise. Notwithstanding the
	foregoing, the Authority, without the joinder of any other party,
	shall have the absolute right to make minor changes or amendments to
	the Restrictions to correct or clarify errors, omissions, mistakes,
	or ambiguities contained therein. No amendment shall be effective
	until such amendment has been recorded in the Official Public
	Records of each of the counties in which the Property is located.
	(9) No improvements (except as specifically set forth
	in Subdivision (11)) shall be constructed or located on the Leased
	Tract within twenty-five feet (25') landward measured horizontally
	from the 1000' contour line of the Lake, a meander line that changes
	over time due to natural forces, such as erosion and accretion;
	provided, however, this restriction shall not include improvements
	inside this setback that are existing at the time the Restrictions
	are filed that (i) have been approved in writing by the Authority,
	and (ii) if such improvements are located within the FERC Project
	Area, have been approved by the Federal Energy Regulatory
	Commission (and to the extent not already approved by the Federal
	Energy Regulatory Commission, the Authority intends to file an
	application to obtain permission for the existing encroachments
	into the FERC Project Area to remain in place). In addition, no
	improvements on the Leased Tract (or any portion thereof) shall be
	constructed or located within five feet (5') of any other boundary
	line (i.e., the side and back boundary lines), other than fences;
	provided, however, this restriction shall not include improvements
	located within this 5' setback that are existing at the time the
	Restrictions are filed and that have been approved in writing by the
	Authority.
	(10) No Owner, Purchaser, or Leaseholder shall have
	any rights to construct any improvements or fencing that block or
	restrict access to the FERC Project Area, except with the written
	consent of the Authority, to be granted or withheld in its sole
	discretion, and except in compliance with the FERC License. This
	limitation does not apply to fences located within the Leased Tract
	and outside the FERC Project Area.
	(11) Erosion control improvements (such as retaining
	walls, rip rap, etc.) and landscape planting may not be constructed
	or located within the FERC Project Area or at or below the 1000'
	contour line without the prior written approval of the Authority.
	Such improvements shall be subject to the terms and conditions set
	forth in the Restrictions, in the FERC License, in any other Federal
	Energy Regulatory Commission rules and regulations, and in the
	Authority's regulations, including without limitation, the
	Shoreline Management Plan.
	(12) No Owner, Purchaser, or Leaseholder shall have
	the right to place, or permit to be placed, any advertisements,
	private notices, signs, or billboards on the Leased Tract except
	that temporary signage customarily found on residential property
	may be placed on the Residential Leased Land at the reasonable
	discretion of the Owner, Purchaser, and/or Leaseholder of that
	portion of the Residential Leased Land.
	(13) No activities shall be conducted on the Leased
	Tract and no improvements constructed on the Leased Tract that are
	or might be unsafe or hazardous to any person or property.
	(14) No Owner, Purchaser, Leaseholder, or occupant of
	any portion of the Leased Tract shall use or permit the use,
	handling, generation, storage, release, disposal, or
	transportation of Hazardous Materials on, about, or under the
	Leased Tract except for such quantities that are routinely utilized
	in connection with residential use (for all portions of the Leased
	Tract except the Commercial Leased Land) or for commercial uses
	that are in compliance with the Restrictions (for the Commercial
	Leased Land), and that are stored, used, and disposed of in
	compliance with all Environmental Laws. Each Owner, Purchaser, and
	Leaseholder shall indemnify, defend, protect, and save the
	Authority, its successors and assigns, trustees, directors,
	employees, and officers and each other Owner, Purchaser, and
	Leaseholder, harmless from and against, and shall reimburse such
	indemnified parties for, all liabilities, obligations, losses,
	claims, damages, fines, penalties, costs, charges, judgments, and
	expenses, including, without limitation, reasonable attorneys'
	fees and expenses that may be imposed upon or incurred or paid by or
	asserted against such indemnified parties by reason of or in
	connection with such Owner's, Purchaser's, or Leaseholder's failure
	to comply with this subdivision.
	(15) No Owner or Purchaser shall conduct, or permit to
	be conducted, any activity on the Leased Tract that is improper,
	immoral, noxious, annoying, creates a nuisance, or is otherwise
	objectionable to other Owners or Purchasers or incompatible with
	the recreational use of the Lake and the FERC Project Area.
	(16) The Residential Leased Land (and any Undeveloped
	Strips that are conveyed to an Owner or Purchaser as part of the
	Residential Leased Land pursuant to Subsection (b) or (c)) shall be
	improved and used solely for single-family residential use,
	inclusive of a garage, fencing, and other such related improvements
	as are necessary or customarily incident to normal residential use
	and enjoyment and for no other use. No portion of the Residential
	Leased Land (and any Undeveloped Strips that are conveyed to an
	Owner or Purchaser as part of the Residential Leased Land pursuant
	to Subsection (b) or (c)) shall be used for manufacturing,
	industrial, business, commercial, institutional, or other
	nonresidential purpose, save and except as set forth in Subdivision
	(17). Notwithstanding the foregoing, Owners, Purchasers, and/or
	Leaseholders shall be permitted to conduct a "garage sale" on their
	respective portion of the Residential Leased Land (and any
	Undeveloped Strips that are conveyed to an Owner or Purchaser as
	part of the Residential Leased Land pursuant to either Subsection
	(b) or (c)) not more than one time per calendar year.
	(17) No professional, business, or commercial
	activity to which the general public is invited shall be conducted
	on the Residential Leased Land (and any Undeveloped Strips that are
	conveyed to an Owner or Purchaser as part of the Residential Leased
	Land pursuant to Subsection (b) or (c)); except an Owner,
	Purchaser, Leaseholder, or occupant of a residence may conduct
	business activities within a residence so long as: (a) the
	existence or operation of the business activity is not apparent or
	detectable by sight, sound, or smell from outside the residence;
	(b) the business activity conforms to all zoning requirements; (c)
	the business activity does not involve door-to-door solicitation of
	residents, lessees, Leaseholders, Owners, or Purchasers within the
	Property; (d) the business does not generate a level of vehicular or
	pedestrian traffic or a number of vehicles parked within the
	Property that is noticeably greater than that which is typical of
	residences in which no business activity is being conducted; and
	(e) the business activity is consistent with the residential
	character of the Residential Leased Land and does not constitute a
	nuisance, or a hazardous or offensive use, or threaten the security
	or safety of other residents, lessees, Owners, Purchasers, or
	Leaseholders of the Property. The terms "business" and "trade", as
	used in this provision, shall be construed to have their ordinary,
	generally accepted meanings and shall include, without limitation,
	any occupation, work, or activity undertaken on an ongoing basis
	that involves the provision of goods or services to persons other
	than the provider's family and for which the provider receives a
	fee, compensation, or other form of consideration, regardless of
	whether: (x) such activity is engaged in full or part-time; (y) such
	activity is intended to or does generate a profit; or (z) a license
	is required. Leasing of a residence shall not be considered a
	business or trade within the meaning of this subsection. This
	subdivision shall not apply to any activity conducted by the
	Authority.
	(18) Except as may be otherwise provided in the
	Restrictions, Commercial Leased Land (and any Undeveloped Strips
	that are conveyed to an Owner or Purchaser as part of the Commercial
	Leased Land pursuant to Subsection (b) or (c)) may be improved and
	used for any lawful commercial purpose, including without
	limitation, nonprofit organizations or governmental or
	quasi-governmental agencies.
	(19) No portion of the Leased Tract may be used for the
	commercial testing or development of wind power, or to produce,
	lease, store, and/or transmit electrical power generated thereby
	for commercial or resale purposes.
	(20) Each Owner or Purchaser shall keep, or cause to be
	kept, all improvements located on its respective portion of the
	Leased Tract maintained in good condition and repair, clean and
	free of rubbish and other hazards, and otherwise in full accordance
	with the Restrictions and all governmental rules, regulations,
	codes, and zoning requirements. Such maintenance shall include, but
	not be limited to, the following: regular and timely removal of all
	litter, garbage, trash, and waste; regular lawn mowing; tree,
	shrub, and plant pruning and trimming; watering of landscaped
	areas; weed control; pest control; maintaining exterior lighting
	and mechanical facilities in good working order; keeping walks and
	driveways clean and in good repair; and the repairing and
	repainting of the exterior improvements visible to neighboring
	properties and/or public view.
	(21) In the event of any damage to or destruction of
	any building or improvement on any portion of the Leased Tract from
	any cause whatsoever, the Owner, Purchaser, or Leaseholder upon
	whose portion of the Leased Tract the casualty occurred shall, at
	such Owner's, Purchaser's, or Leaseholder's sole option, either (i)
	repair, restore, or rebuild and complete the same with reasonable
	diligence, (ii) clear the affected area of all hazardous or
	dangerous debris and structures and lawfully dispose of same within
	one year from the date of casualty, or (iii) effectuate any
	combination of clauses (i) and (ii) of this subdivision as such
	Owner, Purchaser, or Leaseholder may deem reasonably appropriate.
	Notwithstanding the foregoing, in the event the Owner, Purchaser,
	or Leaseholder elects to rebuild buildings or improvements that
	were located within the FERC Project Area or within twenty-five
	feet (25') landward measured horizontally from the 1000' contour
	line that were approved in accordance with Subdivision (9), such
	buildings or improvements shall be rebuilt in accordance with
	Subdivision (24).
	(22) The Texas Commission on Environmental Quality has
	adopted rules governing on-site sewage facilities (also called
	septic systems). The Authority is the commission's authorized
	agent for the septic system licensing program, including the
	enforcement of the commission's septic system rules and regulations
	for the Property. The Authority, as the agent for the commission,
	shall have the authority to access the Property for the purpose of
	issuing such licenses, inspecting such septic systems, and
	enforcing any and all rules and regulations related thereto. Each
	Owner, Purchaser, and Leaseholder agrees to comply with all
	sanitary regulations and the licensing process adopted by the
	commission and enforced by the Authority, as its agent, from time to
	time.
	(23) The Owner or Purchaser shall be responsible, at
	such Owner's or Purchaser's expense, for providing for the
	collection, removal, and disposal of all solid waste on the Leased
	Tract; or the Owner or Purchaser of any portion of the Leased Tract
	shall be responsible for ensuring that the Leaseholders provide for
	such collection, removal, and disposal of all solid waste on the
	applicable portion of the Leased Tract. In the event the Ranch fails
	to provide for the collection, removal, and disposal of all solid
	waste related to the Ranch, the Owner or Purchaser shall be
	responsible for providing for the same.
	(24) (i) An Owner, Purchaser, or Leaseholder, subject
	to approval by the Federal Energy Regulatory Commission, may
	repair, alter, or rebuild improvements located within the FERC
	Project Area, which improvements were previously approved in
	accordance with Subdivision (9); provided, however, such repairs,
	alterations, and/or rebuilding shall not extend beyond the
	footprint of the existing or previously existing improvement.
	(ii) An Owner, Purchaser, or Leaseholder may
	repair, alter, or rebuild improvements located outside the FERC
	Project Area but within 25' landward measured horizontally from the
	1000' contour line, and/or improvements located within the 5'
	boundary setback, which improvements were previously approved in
	accordance with Subdivision (9). Such repairs, alterations, or
	rebuilding may extend such improvements outside the previously
	existing footprint towards the side boundaries and back boundary of
	the applicable Leased Tract, but such improvements may not be
	extended towards the shoreline or encroach closer to the 1000'
	contour line of the Lake than the existing or previously existing
	improvements.
	(25) The Authority shall reserve its rights, title,
	and interest in all oil, gas, and other minerals in and under any
	and all Property, including the Leased Tract.
	(26) No land within the FERC Project Area shall be
	improved, used, or occupied, except in such manner as shall have
	been approved by the Authority and, to the extent required, by the
	Federal Energy Regulatory Commission. No docks, piers, on-water
	facilities, retaining walls, or any other structures or facilities
	shall be built, installed, or maintained in, on, or over the waters
	of the Lake or within the FERC Project Area except as authorized by
	the Authority. All such structures or facilities shall be subject
	to all rules and regulations applicable to the Lake and the FERC
	Project Area, as the same may be adopted or amended from time to
	time. Owner, Purchaser, and/or the Leaseholder shall be responsible
	for any fees or annual charges assessed by the Authority and/or the
	Federal Energy Regulatory Commission for such permit or
	improvements and shall be responsible for ensuring that any such
	improvements are consistent with the FERC License, Shoreline
	Management Plan, and all other rules and regulations applicable to
	the FERC Project Area. Owner or Purchaser shall not, at any time,
	permit any liens to encumber the FERC Project Area.
	(27) No use of the Lake or other bodies of water within
	the Property, if any, shall be made except in accordance with the
	FERC License, the Shoreline Management Plan, the Authority's
	regulations, and any other rules and regulations that may be
	promulgated by the Federal Energy Regulatory Commission and/or the
	Authority at any time and as amended from time to time. Any such use
	shall be subject to the Authority's and the Federal Energy
	Regulatory Commission's superior use rights. The Authority shall
	not be responsible for any loss, damage, or injury to any person or
	property arising out of the authorized or unauthorized use of the
	Lake or other bodies of water within or adjacent to the Property.
	(28) The Authority may use and regulate the Lake or
	other bodies of water within the Property for the irrigation of the
	Authority Land, or for any other purpose deemed appropriate by the
	Authority, subject to the rights and authority of the Federal
	Energy Regulatory Commission or other governmental entity having
	jurisdiction of such areas, and subject to the water rights granted
	(or which may be granted) to the Authority by the State of Texas.
	The Authority's rights under this subdivision shall be superior to
	any rights of any Owner, Purchaser, or Leaseholder. This
	subdivision shall not be construed to limit or restrict the rights
	and authority of the Federal Energy Regulatory Commission or other
	governmental entity having jurisdiction of the Property.
	(29) Owners or Purchasers must obtain written
	permission from the Authority in accordance with the Authority's
	regulations to use or divert water from the Lake on any portion of
	the Leased Tract for domestic or commercial purposes.
	(30) No Owner, Purchaser, or Leaseholder shall be
	permitted to divert or alter the natural drainage of the terrain or
	clear vegetation on any portion of the Property in such a manner
	that would cause unnatural erosion or silting of the Lake.
	(31) Owners, Purchasers, and Leaseholders shall take
	all reasonable precautions to ensure that all use of and activities
	on the Leased Tract and the FERC Project Area, including without
	limitation, the construction, operation, and maintenance of any
	improvements on the Leased Tract, and/or FERC Project Area occur in
	a manner that is in compliance with the FERC License and that will
	protect the scenic, recreational, and environmental values of the
	Lake. The Authority, as a licensee of the Federal Energy Regulatory
	Commission, has specific approval authority on any proposed
	construction that impacts the FERC Project Area or lakebed, and
	Owner, Purchaser, and Leaseholder shall comply with the approval
	process as may be established by the Authority and/or the Federal
	Energy Regulatory Commission from time to time.
	(32) Structures in place within the FERC Project Area
	shall be subject to the FERC License, as the same may be amended
	and/or renewed from time to time. Any structures erected in the FERC
	Project Area after May 15, 1980 (the date of the amendment to the
	previous FERC License) may be required to be removed at the expense
	of the owner of the improvement, unless such improvements are
	approved in writing by the Authority in accordance with the FERC
	License. In no event shall this subdivision grant any
	authorization for a violation of any rules or regulations of the
	Authority, the FERC License, or any state, federal, or local law.
	(33) The Owner, Purchaser, and Leaseholder of any
	portion of the Leased Tract shall comply with all of the following
	rules and regulations:
	(A) the Shoreline Management Plan and any
	amendments or revisions to that document to the extent such
	Shoreline Management Plan applies to the Owner's, Purchaser's,
	and/or Leaseholder's portion of the Leased Tract;
	(B) the applicable rules, regulations, and order
	of the Federal Energy Regulatory Commission including, without
	limitation the FERC License;
	(C) the Authority's "Regulations for Governance
	for Brazos River Authority Lakes and Associated Lands," as
	published on the Authority's Internet website; and
	(D) other rules and regulations adopted by the
	Authority regarding conduct on and use of the Lake or the Property.
	(34) By Texas statute, the Authority is empowered to
	adopt and has adopted certain regulations governing conduct on and
	use of the Property within the FERC Project Area and Lake. Owners,
	Purchasers, Leaseholders, and persons using the Leased Tract with
	such Owners' or Purchasers' consent shall abide by all such rules
	and regulations adopted from time to time by the Authority and any
	future revisions and amendments thereto.
	(35) Owners, Purchasers, and Leaseholders of that
	portion of the Leased Tract that is part of the Ranch shall comply
	with the terms and conditions of the Ranch Agreement and the
	covenants and restrictions set forth in the Ranch Declarations, to
	the extent applicable to such portion of the Leased Tract. As to
	that portion of the Property that is part of the Ranch, the Ranch
	Declarations shall control in the event of any conflict between the
	covenants, restrictions, and conditions set forth in the Ranch
	Declarations and the Restrictions.
	(36) In order to maintain the quality of the Lake's
	water, the stability of the shoreline, and of the environment in the
	Lake's vicinity, each Owner, Purchaser, and Leaseholder of all or
	any portion of the Leased Tract agrees to:
	(A) comply with any local, state, or federal laws
	related to water quality or the environment, including laws
	governing toxic wastes and hazardous substances;
	(B) if the Owner's or Purchaser's private on-site
	sewerage facility is not licensed by the Texas Commission on
	Environmental Quality (or any successor to such Commission) then
	the Owner, Purchaser, or Leaseholder shall connect to and use, at
	the Owner's, Purchaser's, or Leaseholder's expense, as applicable,
	any wastewater treatment system or service that becomes available
	to the Owner's or Purchaser's portion of the Leased Tract, not later
	than twelve (12) months after the system or service becomes
	available to such portion of the Leased Tract and thereafter
	discontinue use of any private on-site sewerage facility; and if,
	at any time after a wastewater treatment system or service becomes
	available to the Owner's or Purchaser's portion of the Leased Tract,
	the Owner's or Purchaser's private on-site sewerage facility
	(whether licensed or not) requires either replacement or an
	alteration or change in the on-site sewerage facility resulting in
	(i) an increase in the volume of permitted flow, (ii) a change in
	the nature of permitted influent, (iii) a change from the planning
	materials approved by the permitting authority, (iv) a change in
	construction, and/or (v) an increase, lengthening, or expansion of
	the treatment or disposal system, then such Owner or Purchaser
	shall promptly connect to and use, at the Owner's, Purchaser's, or
	Leaseholder's expense, as applicable, such wastewater treatment
	system or service and thereafter discontinue use of any private
	on-site sewerage facility. Notwithstanding the foregoing, in the
	event a property owners association or municipality requires the
	Owners or Purchasers of the portion of the Leased Tract that is
	included in such association or municipality to connect to a
	wastewater system or service, then such association or municipality
	rules shall control;
	(C) obtain written consent of the Authority prior
	to diverting or pumping water from the Lake or any body of water
	within or adjacent to the Property, constructing or erecting any
	embankment or retaining wall, or commencing any dredging activity;
	and
	(D) pay to the Authority any reasonable fee
	related thereto (e.g., water usage, recreational user, dredging, or
	retaining wall fees) as may be adopted from time to time by the
	Authority.
	(37) Each Owner or Purchaser of all or any portion of
	the Leased Tract agrees and acknowledges that the water level in the
	Lake varies and that the Authority is not responsible for
	maintaining the Lake at any certain level or above or below any
	certain level.
	(38) The Authority is not responsible or liable for
	any personal injury or damage to any Owner, Purchaser, Leaseholder,
	the Leased Tract, the Property, or any improvements caused by any
	increase or decrease in the water level (even if such increase or
	decrease is due to modifications of the Morris Sheppard (Possum
	Kingdom) Dam or other actions or omissions of the Authority) or
	caused by natural flooding.
	(39) The Authority shall reserve the right of ingress
	and egress for the Authority and any person authorized by the
	Authority, including an agent of the Authority or employees, over
	and across the Leased Tract and any and all on-water facilities
	whether located within the Leased Tract or FERC Project Area for all
	reasonable purposes of the Authority, including, without
	limitation, the construction, maintenance, repair, and/or
	replacements of any roads, drainage facilities, and power, water,
	wastewater, and other utility mains and lines that the Authority
	considers necessary or beneficial and for public safety, health,
	and welfare purposes; provided however, that:
	(A) the Authority shall provide written notice at
	least 48 hours in advance of such entry to the Purchaser or Owner of
	such portion of the Leased Tract (except in the event of an
	emergency, in which case advance notice shall not be required, but
	the Authority shall provide such written notice as soon as
	practicable thereafter), which notice shall state with reasonable
	specificity the purpose for such entry;
	(B) the Authority shall promptly repair any
	damage to the portion of the Leased Tract caused by the Authority's
	entrance onto such Owner's or Purchaser's portion of the Leased
	Tract; and
	(C) the Authority shall use reasonable efforts to
	avoid interfering with the Owner's or Purchaser's use of the portion
	of the Leased Tract.
	(40) Each Owner, Purchaser, and Leaseholder shall
	comply strictly with the Restrictions, as the same may be amended
	from time to time. Failure to comply with the Restrictions shall
	constitute a violation of the Restrictions, and shall give rise to a
	cause of action to recover sums due for damages or injunctive relief
	or both, maintainable by the Authority or other Owners or
	Purchaser; provided however, no Owner, Purchaser, Leaseholder, or
	other person shall have any right of action against the Authority
	arising under the Restrictions.
	(41) The Authority shall make no warranty or
	representation as to the present or future validity or
	enforceability of any such restrictive covenants, terms, or
	provisions. Any Owner, Purchaser, or Leaseholder acquiring or
	leasing, as applicable, any portion of the Property in reliance on
	one or more of the Restrictions shall assume all risks of the
	validity and enforceability thereof and, by acquiring such portion
	of the Property, agrees to hold the Authority harmless therefrom.
	(42) If the Owner, Purchaser, or Leaseholder of any
	portion of the Leased Tracts or on-water facilities related thereto
	(including retaining walls) shall fail to comply with the
	requirements of the Restrictions, then the Authority shall have the
	right, but not the obligation, following thirty (30) days prior
	written notice to such defaulting owner to enter such defaulting
	owner's portion of the Leased Tract (but only if such failure to
	comply results in a public health, safety, or welfare concern)
	and/or such defaulting owner's on-water facility and cure such
	breach, the cost of which shall be reimbursed by such defaulting
	owner to the Authority upon demand. Any such unpaid amounts,
	together with interest thereon (at the rate of six percent (6%) per
	annum) and the costs of collection (if any), shall be charged as a
	continuing lien against such defaulting owner's portion of the
	Leased Tract, which lien shall be subordinate to the lien of any
	third-party deed of trust previously recorded against such
	defaulting owner's portion of the Leased Tract.
	(43) A person shall be deemed to be in default of the
	Restrictions only upon the expiration of thirty (30) days (ten (10)
	days in the event of failure to pay money) from receipt of written
	notice from the Authority or other Owner or Purchaser specifying
	the particulars in which such person has failed to perform the
	obligations of the Restrictions unless such person, prior to the
	expiration of said thirty (30) days (ten (10) days in the event of
	failure to pay money), has rectified the particulars specified in
	said notice of default. However, such person shall not be deemed to
	be in default if such failure (except a failure to pay money) cannot
	be rectified within said thirty (30) day period and such person
	commences the cure of such default within such thirty (30) day
	period and thereafter is continuously using good faith and its best
	efforts to rectify the particulars specified in the notice of
	default.
	(44) The Authority shall have the right, but not the
	obligation, to enforce all of the provisions of the Restrictions.
	Any Owner or Purchaser shall have the right to enforce all of the
	provisions of the Restrictions against any other Owner, Purchaser,
	or Leaseholder, but not against the Authority. Such right of
	enforcement shall include the right to sue for both damages for, and
	injunctive relief against, the breach of any such provision.
	Furthermore, the Authority shall have the right, when appropriate
	in its sole judgment and discretion, to claim or impose a lien upon
	any portion of the Leased Tract, or improvement constructed
	thereon, in order to enforce any right or effect compliance with the
	Restrictions.
	(45) The failure of a person (including the Authority
	or any Owner or Purchaser) to insist upon strict performance of any
	of the Restrictions shall not be deemed a waiver of any rights or
	remedies that said person may have, and shall not be deemed a waiver
	of any subsequent breach or default in the performance of any of the
	Restrictions by the same or any other person.
	(46) The Authority shall not be liable to any Owner,
	Purchaser, or Leaseholder, or to any other person for any loss,
	damage, or injury arising out of or in any way connected with the
	performance or nonperformance of the Authority's rights,
	obligations, or privileges under the Restrictions. Without
	limiting the foregoing, the Authority shall not be liable to any
	Owner, Purchaser, or Leaseholder due to the construction of any
	improvements within the Property.
	(47) Each of the Restrictions on the Leased Tract
	shall be a burden on each portion of the Leased Tract, shall be
	appurtenant to and for the benefit of the other Property, other
	portions of the Leased Tract, and each part thereof, and shall run
	with the land.
	(48) The Restrictions shall inure to the benefit of
	and be binding upon the Owners or Purchasers, their heirs,
	successors, assigns, and personal representatives, and upon any
	person acquiring all or any portion of the Leased Tract, or any
	interest therein, whether by operation of law or otherwise.
	Notwithstanding the foregoing, if any Owner or Purchaser sells or
	transfers all or any portion of such Owner's or Purchaser's interest
	in all or any portion of the Leased Tract, such Owner or Purchaser
	shall, upon the sale and conveyance of title, be released and
	discharged from all of its obligations as Owner or Purchaser in
	connection with the property sold by it arising under the
	Restrictions after the sale and conveyance of title but shall
	remain liable for all obligations arising under the Restrictions
	prior to the sale and conveyance of title. The new Owner or
	Purchaser of all or any such portion of the Leased Tract,
	(including, without limitation, any Owner (or Lienholder) who
	acquires its interest by foreclosure, trustee's sale or otherwise)
	shall be liable for all obligations arising under the Restrictions
	with respect to such portion of the Leased Tract on and/or after the
	date of sale and conveyance of title. The Authority may assign, in
	whole or in part, any of its privileges, exemptions, rights, and
	obligations (if any) under the Restrictions to any other person and
	may permit the participation, in whole or in part, by any other
	person in any of its privileges, exemptions, rights, and
	obligations (if any) hereunder.
	(49) Except as provided in this subsection, the term
	of the Restrictions shall be for a period of fifty (50) years from
	the date such Restrictions are executed by the Authority.
	Notwithstanding the foregoing, upon the expiration of such period,
	the term of the Restrictions shall automatically renew for
	successive periods of five (5) years each unless, at least ninety
	(90) days prior to the date of expiration of any period then in
	effect, (i) the Owners or Purchasers of at least sixty percent (60%)
	of the individual lots that comprise the Residential Leased Land
	and the Commercial Leased Land, (ii) the Owners or Purchasers of at
	least sixty percent (60%) of the land area of the Authority Land,
	and (iii) the Authority, for so long as the Authority has any
	interest in the Property, whether as an Owner or holder of the FERC
	License or otherwise, duly execute, acknowledge and record in the
	office of the recorder of the counties in which the Property is
	located a written termination notice, in which event, the
	Restrictions shall automatically expire at the end of the period
	then in effect.
	(e) Buffer Zone. Notwithstanding any provision in this
	subsection to the contrary, a sale under Subsection (b) or (c) shall
	be subject to the following:
	(1) If at the time Closing occurs under Subsection (b)
	or if at the time a Leaseholder completes the purchase of the
	applicable Leased Tract from the Authority pursuant to Subsection
	(c), as applicable, the Buffer Zone, or any portion thereof, has
	been removed from the FERC Project Area, the Leased Tract being
	conveyed shall include that portion of the Buffer Zone so removed;
	provided, however, the Purchaser and/or Owner, as applicable, shall
	grant the Authority access to the FERC Project Area and Lake to
	allow the Authority to fulfill its obligations as a River Authority
	and any obligations set forth in the FERC License, state water
	rights, or other governmental regulations.
	(2) If at the time Closing occurs under Subsection
	(b), or if at the time a Leaseholder closes on the purchase of the
	applicable Leased Tract from the Authority pursuant to Subsection
	(c), as applicable, the Buffer Zone, or any portion thereof, has not
	been removed from the FERC Project Area and a portion of the Leased
	Tract is located within the Buffer Zone, the Authority shall
	provide such Purchaser and/or Owner, as applicable, a residual
	interest in that portion of the Buffer Zone adjacent to the Leased
	Tract and covered by the applicable residential Ground Lease, such
	residual interest to automatically vest upon satisfaction of either
	of the following conditions:
	(A) the Federal Energy Regulatory Commission
	approves an amendment to the FERC License removing the Buffer Zone
	from the boundaries prescribed by the FERC License such that the
	Buffer Zone is no longer subject to regulation by the Federal Energy
	Regulatory Commission; or
	(B) the FERC License expires (and is not renewed
	or extended) or is otherwise terminated and thus the Buffer Zone is
	no longer subject to regulation by the Federal Energy Regulatory
	Commission.
	(3) Notwithstanding the foregoing, if such residual
	interest has not vested on or before August 31, 2040, then such
	residual interest shall be terminated and of no further force and
	effect. Upon satisfaction of either of the foregoing conditions
	prior to August 31, 2040, this conveyance shall be automatically
	effective without necessity of further documentation. From and
	after the date such conveyance becomes effective, the Buffer Zone
	shall be considered to be a part of the Leased Tract conveyed under
	Subsection (b) or (c) and the Purchaser or then current Owner of the
	applicable Leased Tract shall be the beneficiary of the residual
	interest created herein, but only as to the portion of the Buffer
	Zone located adjacent to the Purchaser's or Owner's property and all
	right, title, and interest in such adjacent portion of the Buffer
	Zone as measured by extending the boundary lines on both sides of
	the applicable portion of the Leased Tract in a straight line across
	the Buffer Zone to the then current 1000' contour line of the Lake,
	or, if such portion cannot reasonably be measured as set forth
	above, then as otherwise determined by the Authority. Such residual
	interest shall immediately vest in the Purchaser or then-current
	Owner of such adjacent Leased Tract without the necessity of any
	additional written conveyance.
	(4) In the event a sale under Subsection (b) or (c)
	does not include the Buffer Zone or any portion thereof, or only
	includes a residual interest in the Buffer Zone or any portion
	thereof, then such Buffer Zone shall remain subject to the terms and
	conditions of the residential Ground Lease in effect between the
	Leaseholder and the Authority at the time Closing occurs under
	Subsection (b) or at the time the Leaseholder purchases the
	applicable Leased Tract under Subsection (c); provided, however, no
	rent shall be due the Authority under such Ground Lease for the
	Buffer Zone. At such time as the applicable Ground Lease expires or
	is otherwise terminated, the Authority may, subject to approval of
	the Federal Energy Regulatory Commission, grant the Purchaser or
	the then-current Owner of the adjacent tract (as determined
	pursuant to the method set forth in Subdivision (2)(B)), an
	easement for use of such portion of the Buffer Zone, which easement
	shall be subject to the FERC License. The Authority shall retain
	ownership of such portion of the Buffer Zone and exercise control
	over such portion of the Buffer Zone consistent with the FERC
	License and this subsection. The easement granted to such Owner
	shall be limited to uses permitted under the terms of the FERC
	License and the Authority's Shoreline Management Plan, and any
	other Authority rules and regulations as may be adopted from time to
	time.
	(f) Purchase Price. For purposes of determining the
	purchase price and/or lease rate pursuant to the options set forth
	in Subsection (b)(1) or the purchase price in Subsection (c), in the
	event the appraisal district does not provide an assessed value for
	the applicable portion of the Leased Tract for the applicable year,
	then the land only assessed value without any exemptions for the
	applicable portion of the Leased Tract shall be calculated based on
	the assessed value per square foot of comparable lots with similar
	physical characteristics in the applicable county or adjoining
	counties, as determined by the Authority.
	(g) Roads. Authority or Purchaser, whichever is
	applicable, shall transfer its interest in the Roads to the
	applicable county in which the Roads, or any portion thereof, are
	situated as follows:
	(1) All Roads located in Stephens County
	(approximately three miles of Roads) shall be transferred to
	Stephens County on or before December 31, 2011.
	(2) All Roads located in Palo Pinto County
	(approximately forty-six miles of Roads) shall be transferred to
	Palo Pinto County in twenty percent increments of the total mileage
	per year for five consecutive years. The first twenty percent
	increment shall be transferred on or before December 31, 2011, and
	each remaining twenty percent increment shall be transferred on or
	before December 31 of each subsequent year, but not before January 1
	of such year unless approved by an order or resolution of the Palo
	Pinto County Commissioners Court, with the final twenty percent
	increment being transferred on or before December 31, 2015, but not
	before January 1, 2015, unless approved by an order or resolution of
	the Palo Pinto County Commissioners Court.
	(3) Authority or Purchaser, whichever is applicable,
	in consultation with the Palo Pinto County Commissioner or
	Commissioners who have jurisdiction over the Leased Tract, shall
	determine which Roads or portions thereof shall be transferred each
	year.
	(4) The transfer of any portion of the Roads located
	within the FERC Project Area shall be in accordance with the FERC
	License and may be in the form of a grant of a right-of-way or
	easement, unless otherwise authorized by the Federal Energy
	Regulatory Commission.
	(5) Beginning on the date of transfer, the Authority
	or Purchaser, whichever is applicable, shall no longer have any
	obligations regarding such Roads. The Roads shall be transferred
	in their "as-is" condition and neither the Authority nor the
	Purchaser shall have any obligation to ensure that the Roads, or any
	portion thereof, comply with the standards in effect at the time of
	transfer in the applicable county for like roads currently
	maintained by that county.
	(6) Concurrently with the transfer in each year of a
	portion of the Roads, the Authority or Purchaser, as applicable,
	shall transfer to Palo Pinto County the amount, rounded to the
	nearest dollar, computed by multiplying $200,000 by a fraction the
	numerator of which is the number of miles of Roads located in and
	transferred to Palo Pinto County in that year and the denominator of
	which is the total number of miles of Roads located in and
	transferred or to be transferred to Palo Pinto County. For every
	other county in which a portion of the Roads is located, the
	Authority or Purchaser, as applicable, shall transfer an amount
	equal to (A) the per mile road payment (as defined below) multiplied
	by (B) the number of miles of the Roads located in such county. As
	used in this subdivision, "per mile road payment" means the amount,
	rounded to the nearest dollar, computed by dividing $200,000 by the
	total number of miles of Roads located in and transferred or to be
	transferred to Palo Pinto County pursuant to this subsection.
	(7) Notwithstanding any provision in this subsection
	to the contrary, the Authority or Purchaser, as applicable, shall
	retain ownership of any portion of a Road that is inaccessible to
	the public. For purposes of this subdivision, a portion of the Road
	is considered inaccessible to the public if, as of the effective
	date of the Act enacting this section, the public can only access
	such portion of the Road by crossing property not owned by the
	Authority or Purchaser, as applicable, and not subject to an
	easement or other ownership interest that allows the public to
	cross such property without restriction. If a retained portion of a
	Road subsequently becomes accessible to the public, the Authority
	or Purchaser, as applicable, shall transfer such retained portion,
	including any interest the Authority or Purchaser has in any
	additional Road constructed or acquired by the Authority or
	Purchaser in order to make the retained portion of the Road
	accessible to the public, to the applicable county in accordance
	with the process set forth in this subsection, or in the event such
	portion of the Road becomes accessible to the public after December
	31, 2015, within one (1) year of such retained portion of the Road
	becoming accessible.
	(h) Platting. A sale of the Leased Tract under this section
	shall not be subject to Chapter 232, Local Government Code, or any
	other platting requirement.
	(i) Mineral Interests. The Authority shall reserve its
	interest in all oil, gas, and other minerals in and under the Leased
	Tract (or any portion thereof) sold under this section.
	SECTION 2. If the provisions of Section 8502.020, Special
	District Local Laws Code, as added by this Act, conflict with any
	other provisions of Chapter 8502 of that code, then the provisions
	of Section 8502.020 shall prevail, notwithstanding all such
	conflicting provisions.
	SECTION 3. This Act takes effect immediately if it receives
	a vote of two-thirds of all members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2009.


	______________________________	______________________________
	President of the Senate	Speaker of the House


	I certify that H.B. No. 3031 was passed by the House on April
	28, 2009, by the following vote: Yeas 149, Nays 0, 1 present, not
	voting.

	______________________________
	Chief Clerk of the House


	I certify that H.B. No. 3031 was passed by the Senate on May
	15, 2009, by the following vote: Yeas 30, Nays 0.

	______________________________
	Secretary of the Senate
	APPROVED: _____________________
	Date

	_____________________
	Governor